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Loans
 3 Months Ended
Sep. 30, 2020
Receivables [Abstract]  
Loans Loans and Allowance for Credit Losses on Loans
Loans consist of the following at the dates indicated:
September 30, 2020June 30,
2020
Commercial loans:
Commercial real estate$1,068,255 $1,052,906 
Construction and development216,757 215,934 
Commercial and industrial148,413 154,825 
Equipment finance250,813 229,239 
Municipal finance130,337 127,987 
Paycheck Protection Program80,816 80,697 
Total commercial loans1,895,391 1,861,588 
Retail consumer loans:
One-to-four family459,285 473,693 
HELOCs - originated135,885 137,447 
HELOCs - purchased61,535 71,781 
Construction and land/lots78,799 81,859 
Indirect auto finance128,466 132,303 
Consumer10,035 10,259 
Total retail consumer loans874,005 907,342 
Total loans2,769,396 2,768,930 
Deferred loan costs, net— 189 
Total loans, net of deferred loan costs2,769,396 2,769,119 
Allowance for credit losses(43,132)(28,072)
Loans, net$2,726,264 $2,741,047 
All qualifying one-to-four family first mortgage loans, HELOCs, commercial real estate loans, and FHLB Stock are pledged as collateral by a blanket pledge to secure any outstanding FHLB advances.
In accordance with the adoption of ASU 2016-13, the above table reflects the loan portfolio at the amortized cost basis as of September 30, 2020, to include net deferred cost of $1,941 and unamortized discount total related to loans acquired of $5,126. Accrued interest receivable of $9,859 is accounted for separately. The ACL at June 30, 2020 includes the Day 2 valuation allowance on PCI loans of $182.
The June 30, 2020 information in the above table reflects the loan portfolio prior to the adoption of ASU 2016-13. This information was reported as shown in the below tables under "Loans and Allowance for Loan Losses - Pre ASU 2016-13", with the acquired loans being net of earned income and of related discounts, which includes the credit discount on the acquired credit impaired loans.
Loans are monitored for credit quality on a recurring basis and the composition of the loans outstanding by credit quality indicator is provided below. Loan credit quality indicators are developed through review of individual borrowers on an ongoing basis. Generally, loans are monitored for performance on a quarterly basis with the credit quality indicators adjusted as needed. The indicators represent the rating for loans as of the date presented based on the most recent assessment performed. These credit quality indicators are defined as follows:
Pass—A pass rated asset is not adversely classified because it does not display any of the characteristics for adverse classification.
Special Mention—A special mention asset has potential weaknesses that deserve management’s close attention. If left uncorrected, such potential weaknesses may result in deterioration of the repayment prospects or collateral position at some future date. Special mention assets are not adversely classified and do not warrant adverse classification.
Substandard—A substandard asset is inadequately protected by the current net worth and paying capacity of the obligor, or of the collateral pledged, if any. Assets classified as substandard generally have a well-defined weakness, or weaknesses, that jeopardize the liquidation of the debt. These assets are characterized by the distinct possibility of loss if the deficiencies are not corrected.
Doubtful—An asset classified doubtful has all the weaknesses inherent in an asset classified substandard with the added characteristic that the weaknesses make collection or liquidation in full highly questionable and improbable, on the basis of currently existing facts, conditions, and values.
Loss—Assets classified loss are considered uncollectible and of such little value that their continuing to be carried as an asset is not warranted. This classification is not necessarily equivalent to no potential for recovery or salvage value, but rather that it is not appropriate to defer a full write-off even though partial recovery may be effected in the future.
The following table presents the credit risk profile by risk grade for commercial loans by origination year:
Term Loans By Origination Year
September 30, 202020212020201920182017PriorRevolvingTotal
Commercial real estate
Risk rating:
Pass$39,049 $178,905 $136,267 $205,282 $179,598 $244,649 $65,271 $1,049,021 
Special mention— — — 1,300 4,419 3,134 149 9,002 
Substandard— — — — 5,368 4,848 — 10,216 
Doubtful
— — — — — — — — 
Loss— 16 — — — — — 16 
Total commercial real estate$39,049 $178,921 $136,267 $206,582 $189,385 $252,631 $65,420 $1,068,255 
Construction and development
Risk rating:
Pass$4,304 $12,761 $19,144 $9,042 $2,481 $9,010 $158,838 $215,580 
Special mention— — — — — 624 — 624 
Substandard— — — — — 553 — 553 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and development$4,304 $12,761 $19,144 $9,042 $2,481 $10,187 $158,838 $216,757 
Commercial and industrial
Risk rating:
Pass$7,657 $14,411 $23,496 $20,091 $19,799 $13,747 $28,483 $127,684 
Special mention— — 1,116 — 9,624 193 9,494 20,427 
Substandard— — — 133 65 104 — 302 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total commercial and industrial$7,657 $14,411 $24,612 $20,224 $29,488 $14,044 $37,977 $148,413 
Equipment finance
Risk rating:
Pass$34,390 $131,227 $76,761 $7,057 $— $— $— $249,435 
Special mention— 131 406 — — — — 537 
Substandard— 174 667 — — — — 841 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total equipment finance$34,390 $131,532 $77,834 $7,057 $— $— $— $250,813 
Municipal leases
Risk rating:
Pass$— $21,521 $15,102 $20,487 $10,731 $58,216 $4,009 $130,066 
Special mention— — — — — 271 — 271 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total municipal leases$— $21,521 $15,102 $20,487 $10,731 $58,487 $4,009 $130,337 
Paycheck protection program
Risk rating:
Pass$— $80,816 $— $— $— $— $— $80,816 
Special mention— — — — — — — — 
Substandard— — — — — — — — 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total paycheck protection program$— $80,816 $— $— $— $— $— $80,816 
Total commercial loans
Risk rating:
Pass$85,400 $439,641 $270,770 $261,959 $212,609 $325,622 $256,601 $1,852,602 
Special mention— 131 1,522 1,300 14,043 4,222 9,643 30,861 
Substandard— 174 667 133 5,433 5,505 — 11,912 
Doubtful— — — — — — — — 
Loss— 16 — — — — — 16 
Total commercial loans$85,400 $439,962 $272,959 $263,392 $232,085 $335,349 $266,244 $1,895,391 
The following table presents the credit risk profile by risk grade for consumer loans by origination year:
Term Loans By Origination Year
September 30, 202020212020201920182017PriorRevolvingTotal
One-to-four family
Risk rating:
Pass$20,156 $49,079 $66,389 $64,066 $51,948 $191,398 $4,700 $447,736 
Special mention— — — — 29 2,017 — 2,046 
Substandard— 1,008 — 219 206 7,868 — 9,301 
Doubtful— — — — — 202 — 202 
Loss— — — — — — — — 
Total one-to-four family$20,156 $50,087 $66,389 $64,285 $52,183 $201,485 $4,700 $459,285 
HELOCs - originated
Risk rating:
Pass$1,021 $1,565 $1,638 $691 $751 $9,656 $117,713 $133,035 
Special mention— — — — — 807 — 807 
Substandard— — — — 39 1,800 204 2,043 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total HELOCs - originated$1,021 $1,565 $1,638 $691 $790 $12,263 $117,917 $135,885 
HELOCs - purchased
Risk rating:
Pass$— $— $— $— $— $— $60,875 $60,875 
Special mention— — — — — — — — 
Substandard— — — — — — 660 660 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total HELOCs - purchased$— $— $— $— $— $— $61,535 $61,535 
Construction and land/lots
Risk rating:
Pass$103 $17,279 $5,105 $2,025 $— $5,874 $47,790 $78,176 
Special mention— — — — — — — — 
Substandard— — — 105 — 518 — 623 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total construction and land/lots$103 $17,279 $5,105 $2,130 $— $6,392 $47,790 $78,799 
Indirect auto finance
Risk rating:
Pass$11,876 $38,790 $25,030 $30,623 $14,176 $6,446 $— $126,941 
Special mention— — — — — — — — 
Substandard— 121 405 565 255 179 — 1,525 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total indirect auto finance$11,876 $38,911 $25,435 $31,188 $14,431 $6,625 $— $128,466 
Total consumer loans
Risk rating:
Pass$563 $1,469 $6,432 $439 $202 $246 $369 $9,720 
Special mention— — — 4 — — — 4 
Substandard223 18 11 18 6 25 10 311 
Doubtful— — — — — — — — 
Loss— — — — — — — — 
Total consumer loans$786 $1,487 $6,443 $461 $208 $271 $379 $10,035 
Total retail consumer loans
Risk rating:
Pass$33,719 $108,182 $104,594 $97,844 $67,077 $213,620 $231,447 $856,483 
Special mention— — — 4 29 2,824 — 2,857 
Substandard223 1,147 416 907 506 10,390 874 14,463 
Doubtful— — — — — 202 — 202 
Loss— — — — — — — — 
Total retail consumer loans$33,942 $109,329 $105,010 $98,755 $67,612 $227,036 $232,321 $874,005 
The following table presents the credit risk profile by risk grade for consumer and commercial loans, prior to the adoption of ASU 2016-13:
PassSpecial
Mention		SubstandardDoubtfulLossTotal
June 30, 2020
Commercial loans:
Commercial real estate$1,028,709 $7,580 $10,779 $— $16 $1,047,084 
Construction and development212,370 2,723 250 1 — 215,344 
Commercial and industrial130,202 20,439 2,622 — — 153,263 
Equipment finance228,288 150 801 — — 229,239 
Municipal finance127,706 281 — — — 127,987 
Paycheck Protection Program80,697 — — — — 80,697 
Retail consumer loans:
One-to-four family458,248 1,724 9,042 206 — 469,220 
HELOCs - originated134,697 902 1,848 — — 137,447 
HELOCs - purchased71,119 — 662 — — 71,781 
Construction and land/lots81,112 — 402 — — 81,514 
Indirect auto finance130,975 — 1,328 — — 132,303 
Consumer9,894 4 361 — — 10,259 
Total loans$2,694,017 $33,803 $28,095 $207 $16 $2,756,138 
The following table presents the credit risk profile by risk grade for PCI consumer and commercial loans, prior to the adoption of ASU 2016-13:
PassSpecial
Mention		SubstandardDoubtfulLossTotal
June 30, 2020
Commercial loans:
Commercial real estate$3,181 $1,742 $899 $— $— $5,822 
Construction and development271 — 319 — — 590 
Commercial and industrial1,556 — 3 — 3 1,562 
Retail consumer loans:
One-to-four family2,994 465 1,014 — — 4,473 
Construction and land/lots108 — 237 — — 345 
Total loans$8,110 $2,207 $2,472 $— $3 $12,792 
The following table presents an aging analysis of past due loans (includes nonaccrual loans) by segment and class:
Past DueTotal
30-89 Days90 Days+TotalCurrentLoans
September 30, 2020
Commercial loans:
Commercial real estate$— $2,108 $2,108 $1,066,147 $1,068,255 
Construction and development— 361 361 216,396 216,757 
Commercial and industrial29 90 119 148,294 148,413 
Equipment finance— 580 580 250,233 250,813 
Municipal finance— — — 130,337 130,337 
Paycheck Protection Program— — — 80,816 80,816 
Retail consumer loans:
One-to-four family2,248 2,127 4,375 454,910 459,285 
HELOCs - originated297 384 681 135,204 135,885 
HELOCs - purchased145 47 192 61,343 61,535 
Construction and land/lots— 249 249 78,550 78,799 
Indirect auto finance454 482 936 127,530 128,466 
Consumer227 33 260 9,775 10,035 
Total loans$3,400 $6,461 $9,861 $2,759,535 $2,769,396 
The following table presents an aging analysis of past due loans by segment and class, prior to the adoption of ASU 2016-13:
Past DueTotal
30-89 Days90 Days+TotalCurrentLoans
June 30, 2020
Commercial loans:
Commercial real estate$4,528 $2,892 $7,420 $1,045,486 $1,052,906 
Construction and development293 341 634 215,300 215,934 
Commercial and industrial— 91 91 154,734 154,825 
Equipment finance303 498 801 228,438 229,239 
Municipal finance— — — 127,987 127,987 
Paycheck Protection Program— — — 80,697 80,697 
Retail consumer loans:
One-to-four family1,679 3,147 4,826 468,867 473,693 
HELOCs - originated442 310 752 136,695 137,447 
HELOCs - purchased214 47 261 71,520 71,781 
Construction and land/lots— 252 252 81,607 81,859 
Indirect auto finance756 285 1,041 131,262 132,303 
Consumer30 25 55 10,204 10,259 
Total loans$8,245 $7,888 $16,133 $2,752,797 $2,768,930 
The following table presents recorded investment in loans on nonaccrual status, by segment and class, including restructured loans. It also includes interest income recognized on nonaccrual loans for the three months ended September 30, 2020.
September 30, 2020June 30, 202090 Days + &
still accruing as of September 30, 2020		Nonaccrual with no allowance as of September 30, 2020Interest income recognized
Commercial loans:
Commercial real estate$7,841 $8,869 $— $4,665 $232 
Construction and development554 465 — 78 29 
Commercial and industrial250 259 — 26 38 
Equipment finance668 801 — 516 — 
Retail consumer loans:
One-to-four family2,746 3,582 — 784 99 
HELOCs - originated619 531 — — 34 
HELOCs - purchased660 662 — — 7 
Construction and land/lots249 37 — — 6 
Indirect auto finance797 668 — — 32 
Consumer36 49 — — 6 
Total loans$14,420 $15,923 $— $6,069 $483 
The decrease in the nonaccrual balance in the above schedule, compared to June 30, 2020, is mainly due to one large commercial nonaccrual loan paying off partially offset by the addition of nonaccrual loans of $965 of PCI loans, formerly accounted for as credit impaired loans, prior to the adoption of ASU 2016-13. These loans were previously excluded from nonaccrual loans. The adoption of CECL resulted in the discontinuation of the pool-level accounting for acquired credit impaired loans and replaced it with loan-level evaluation for nonaccrual status.
The following table presents an analysis of the ACL by segment:
Three Months Ended September 30, 2020
CommercialRetail
Consumer		Total
Balance at beginning of period$21,116 $6,956 $28,072 
Impact of adoption ASU 2016-134,073 10,736 14,809 
Provision for credit losses292 658 950 
Charge-offs(1,095)(682)(1,777)
Recoveries813 265 1,078 
Net charge-offs(282)(417)(699)
Balance at end of period$25,199 $17,933 $43,132 
The following table presents an analysis of the allowance for loan losses by segment, prior to the adoption of ASU 2016-13:
Three Months Ended September 30, 2019
PCICommercialRetail
Consumer		Total
Balance at beginning of period$201 $14,809 $6,419 $21,429 
Provision for (recovery of) loan losses(7)455 (448)— 
Charge-offs— (35)(395)(430)
Recoveries— 163 152 315 
Balance at end of period$194 $15,392 $5,728 $21,314 
The following table presents ending balances of loans and the related ACL, by segment and class:
Allowance for Credit LossesTotal Loans Receivable
Loans
individually
evaluated 		Loans
collectively
evaluated		TotalLoans
individually
evaluated 		Loans
collectively
evaluated		Total
September 30, 2020
Commercial loans:
Commercial real estate$90 $11,915 $12,005 $6,552 $1,061,703 $1,068,255 
Construction and development— 2,736 2,736 80 216,677 216,757 
Commercial and industrial16 3,564 3,580 839 147,574 148,413 
Equipment finance84 6,355 6,439 606 250,207 250,813 
Municipal finance— 438 438 — 130,337 130,337 
Paycheck Protection Program— — — — 80,816 80,816 
Retail consumer loans:
One-to-four family16 9,953 9,969 3,269 456,016 459,285 
HELOCs - originated— 2,016 2,016 — 135,885 135,885 
HELOCs - purchased— 932 932 — 61,535 61,535 
Construction and land/lots— 1,599 1,599 32 78,767 78,799 
Indirect auto finance— 3,139 3,139 — 128,466 128,466 
Consumer— 279 279 — 10,035 10,035 
Total$206 $42,926 $43,132 $11,378 $2,758,018 $2,769,396 
The following table presents ending balances of loans and the related allowance, by segment and class, prior to the adoption of ASU 2016-13:
Allowance for Loan LossesTotal Loans Receivable
PCILoans
individually
evaluated for
impairment		Loans
collectively
evaluated		TotalPCILoans
individually
evaluated for
impairment		Loans
collectively
evaluated		Total
June 30, 2020
Commercial loans:
Commercial real estate$113 $961 $10,731 $11,805 $5,822 $7,924 $1,039,160 $1,052,906 
Construction and development4 5 3,599 3,608 590 299 215,045 215,934 
Commercial and industrial15 31 2,153 2,199 1,562 852 152,411 154,825 
Equipment finance— 209 2,598 2,807 — 801 228,438 229,239 
Municipal finance— — 697 697 — — 127,987 127,987 
Paycheck Protection Program— — — — — — 80,697 80,697 
Retail consumer loans:
One-to-four family17 52 2,400 2,469 4,473 4,304 464,916 473,693 
HELOCs - originated— — 1,344 1,344 — — 137,447 137,447 
HELOCs - purchased— — 430 430 — — 71,781 71,781 
Construction and land/lots33 — 1,409 1,442 345 296 81,218 81,859 
Indirect auto finance— — 1,136 1,136 — 10 132,293 132,303 
Consumer— — 135 135 — — 10,259 10,259 
Total$182 $1,258 $26,632 $28,072 $12,792 $14,486 $2,741,652 $2,768,930 
Prior to the adoption of ASU 2016-13, loans acquired through acquisitions were initially excluded from the allowance for loan losses in accordance with the acquisition method of accounting for business combinations. The Company recorded these loans at fair value, which includes a credit discount, therefore, no allowance for loan losses was established for these acquired loans at acquisition. A provision for loan losses was recorded for any further deterioration in these acquired loans subsequent to the acquisition.
The following table presents impaired loans and the related allowance, by segment and class, excluding PCI loans, prior to the adoption of ASU 2016-13:
 Total Impaired Loans
Unpaid
Principal
Balance		Recorded
Investment
With a
Recorded
Allowance		Recorded
Investment
With No
Recorded
Allowance		TotalRelated
Recorded
Allowance
June 30, 2020     
Commercial loans:
Commercial real estate$10,401 $8,062 $1,068 $9,130 $976 
Construction and development1,785 818 80 898 11 
Commercial and industrial9,782 1,058 26 1,084 34 
Equipment finance2,631 303 498 801 209 
Retail consumer loans:     
One-to-four family16,560 10,805 3,374 14,179 412 
HELOCs - originated2,087 1,585 53 1,638 43 
HELOCs - purchased662 662 — 662 3 
Construction and land/lots1,585 749 296 1,045 13 
Indirect auto finance1,075 486 241 727 5 
Consumer297 38 27 65 2 
Total impaired loans$46,865 $24,566 $5,663 $30,229 $1,708 
The table above includes $15,743, of impaired loans that were not individually evaluated because these loans did not meet the Company's threshold for individual impairment evaluation. The recorded allowance above includes $450 related to these loans that were not individually evaluated.
The following table present average recorded investments in impaired loans and interest income recognized on impaired loans, prior to the adoption of ASU 2016-13:
Three Months Ended
September 30, 2019
Average
Recorded
Investment		Interest
Income
Recognized
Commercial loans:
Commercial real estate$9,614 $77 
Construction and development1,686 14 
Commercial and industrial734 10 
Equipment finance703 8 
Retail consumer loans:
One-to-four family15,338 206 
HELOCs - originated1,873 29 
HELOCs - purchased571 3 
Construction and land/lots1,195 24 
Indirect auto finance448 5 
Consumer47 3 
Total loans$32,209 $379 
The following table presents a summary of changes in the accretable yield for PCI loans, prior to the adoption of ASU 2016-13:
 Three Months Ended
September 30, 2019
Accretable yield, beginning of period$5,259 
Reclass from nonaccretable yield (1)
115 
Other changes, net (2)
(14)
Interest income(444)
Accretable yield, end of period$4,916 
______________________________________
(1)    Represents changes attributable to expected loss assumptions.
(2)    Represents changes in cash flows expected to be collected due to the impact of modifications, changes in prepayment assumptions, and changes in interest rates.
In estimating ECL, ASC 326 prescribes that if foreclosure is probable, a CDA is required to be measured at the fair value of collateral, but as a practical expedient, if foreclosure is not probable, fair value measurement is optional. For those CDA loans measured at the fair value of collateral, a credit loss expense is recorded for loan amounts in excess of fair value. The following table provides a breakdown between loans identified as CDAs and non-CDAs, by segment and class, and securing collateral, as well as collateral coverage for those loans at September 30, 2020:
Type of Collateral and Extent to Which Collateral Secures Financial Assets
Residential PropertyInvestment PropertyCommercial PropertyBusiness AssetsOtherFinancial Assets Not Considered Collateral DependentTotal
Commercial loans:
Commercial real estate$— $3,798 $2,468 $— $— $1,061,989 1,068,255 
Construction and development— 78 — — — 216,679 216,757 
Commercial and industrial— — — 25 — 148,388 148,413 
Equipment finance— — — 516 — 250,297 250,813 
Municipal finance— — — — — 130,337 130,337 
Paycheck Protection Program— — — — — 80,816 80,816 
Retail consumer loans:
One-to-four family1,085 — — — — 458,200 459,285 
HELOCs - originated— — — — — 135,885 135,885 
HELOCs - purchased— — — — — 61,535 61,535 
Construction and land/lots— — — — — 78,799 78,799 
Indirect auto finance— — — — — 128,466 128,466 
Consumer— — — — — 10,035 10,035 
Total$1,085 $3,876 $2,468 $541 $— $2,761,426 $2,769,396 
Total Collateral Value$1,205 $3,924 $2,732 $565 $— 
For the three months ended September 30, 2020 and 2019, the following table presents a breakdown of the types of concessions made on TDRs by loan class:
Three Months Ended September 30, 2020Three Months Ended September 30, 2019
Number
of
Loans		Pre
Modification
Outstanding
Recorded
Investment		Post
Modification
Outstanding
Recorded
Investment		Number
of
Loans		Pre
Modification Outstanding Recorded
Investment		Post
Modification
Outstanding
Recorded
Investment
Extended payment terms:      
Retail consumer:      
One-to-four family— $— $— 1 $14 $14 
Other TDRs:      
Commercial:
Commercial and industrial1 4,407 3,800 — — — 
Retail consumer:      
One-to-four family— — — 3 35 34 
Indirect auto finance6 105 78 4 68 65 
Total7 $4,512 $3,878 8 $117 $113 
Other TDRs include TDRs that have a below market interest rate and extended payment terms. The Company does not typically forgive principal when restructuring troubled debt.
The following table presents loans that were modified as TDRs within the previous 12 months and for which there was a payment default during the three months ended September 30, 2020 and 2019:
Three Months Ended September 30, 2020Three Months Ended September 30, 2019
Number of
Loans		Recorded
Investment		Number of
Loans		Recorded
Investment
Other TDRs:    
Retail consumer:    
One-to-four family— $— 2 $122 
Indirect auto finance1 11 — — 
Consumer— — 1 2 
Total
1 $11 3 $124 
In the determination of the ACL, management considers TDRs for all loan classes, and the subsequent nonperformance in accordance with their modified terms, by measuring impairment on a loan-by-loan basis based on either the value of the loan's expected future cash flows discounted at the loan's original effective interest rate or on the collateral value, net of the estimated costs of disposal, if the loan is collateral dependent.
Off-Balance-Sheet Credit Exposure
The Company maintains a separate reserve for credit losses from off-balance-sheet credit exposures, including unfunded loan commitments, which is included in other liabilities on the consolidated balance sheets. The reserve for credit losses on off-balance-sheet credit exposures is adjusted as a provision for credit losses in the consolidated statements of income. The estimate includes consideration of the likelihood that funding will occur and an estimate of ECLs on commitments expected to be funded over its estimated life, utilizing the same models and approaches for the Company's other loan portfolio segments described above, as these unfunded commitments share similar risk characteristics as our loan portfolio segments. The Company has identified the unfunded portion of certain lines of credit as unconditionally cancellable credit exposures, meaning the Company can cancel the unfunded commitment at any time. No credit loss estimate is reported for off-balance-sheet credit exposures that are unconditionally cancellable by the Company or for undrawn amounts under such arrangements that may be drawn prior to the cancellation of the arrangement. At September 30, 2020, the liability for credit losses on off-balance-sheet credit exposures included in other liabilities was $2,288.
Modifications in response to COVID-19
Beginning in March 2020, the Company began offering short-term loan modifications to assist borrowers during the COVID-19 pandemic. The CARES Act along with a joint agency statement issued by banking agencies and confirmed by FASB staff that short-term modifications made in response to COVID-19 are not TDRs. Accordingly, the Company does not account for such loan modifications as TDRs. As of September 30, 2020, modifications totaling $1,106 and $90,138 had been granted in retail consumer loans and commercial loans, respectively.
The Bank is offering payment and financial relief programs for borrowers impacted by COVID-19. These programs include loan payment deferrals for up to 90 days (which can be renewed for another 90 days under certain circumstances) waived late fees, and suspension of foreclosure proceedings and repossessions. Since March, we have received numerous requests from borrowers for some type of payment relief; however, the majority of these payment deferrals have ended and borrowers are again making regular loan payments. The breakout of loans deferred by loan type as of the dates indicated is as follows:
Payment Deferrals by Loan Types (1)
September 30, 2020August 31, 2020June 30, 2020
DeferralPercent of Total Loan PortfolioDeferralPercent of Total Loan PortfolioDeferralPercent of Total Loan Portfolio
Lodging$60,782 2.2 %$64,686 2.4 %$108,171 4.0 %
Other commercial real estate, construction and development, and commercial and industrial 27,169 1.0 43,056 1.6 367,443 13.7 
Equipment finance2,187 0.1 4,547 0.2 33,693 1.3 
One-to-four family684 — 2,360 0.1 36,821 1.4 
Other consumer loans422 — 589 — 5,203 0.2 
     Total$91,244 3.3 %$115,238 4.3 %$551,331 20.6 %
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(1)    Modified loans are not included in classified assets or nonperforming assets.